Refusal of Bank to Honor Trust

Our family's living revocable trust has 4 trustees. Each is empowered in the trust to act individually as they see fit. We have had difficulty with certain banks refusing to honor these terms of the trust. Some have required their own 'trust' form to be submitted, with all 4 trustees signing. While others have requested all 4 signatures for business transactions.

Has anyone else experienced this? Are there simple remedies? If not, has anyone gone through a court order process to compel?

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Aug 30, 2011
Motion to Compel Enforcement of Living Trust
by: Mo Johnson

Assuming the living trust is valid and meets the requirements of state law, a motion to compel the bank to enforce should be successful.

But, I'm not sure why you would want to go through the time and expense of doing that when simply having all 4 executors sign would resolve the issue. Banks sometimes require this because trusts can be complex and there could be provisions in them which would allow one executor who disagreed with what another did to sue over it.

So, to avoid any potential problems, the bank (as a result of bitter experience) might now require all 4 signatures and maybe on their own form since they know exactly what their own form says and don't have to have an attorney review individual, and often lengthy, living trust documents.

If it's important for the purpose of a trust to allow individual trustees to make withdrawals with only their signature (for instance frequent and small withdrawals) -- then I'd recommend finding a financial institution that will allow the trust to be managed as you want to do it. Maybe move sufficient resources to that institution to handle those needs and leave the rest where it is.

Please post any follow-up questions. Thanks.

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